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Staff Report —Fiscal Year 2012-13 Mid -Year Budget Review
February 19, 2013
However, Proposition D (or "District") Taxes, the distribution of which is based upon the
location and/or residence of the purchaser for automobile and certain durable goods sales, rather
than the point of sale, and, therefore, do not always "track" sales taxes, are $178,824 below last
year, with cross jurisdictional purchases of durable goods by National City businesses and
individuals subsiding. As discussed in the first quarter budget status report, the "Other Revenue"
difference is attributed to the $830,000 of one-time revenue received in the first quarter of FY
2011-12 from the San Diego Unified Port District for the aquatics center project. Adjusting for
this amount, fiscal year- to -date total revenues exceed those of the prior year by $734,158.
Based upon the above and other historical data, input from the City's sales tax consultant, and
information from State of California and San Diego County sources, staff projects overall year-
end General Fund revenues to exceed the adjusted budget by approximately $902,600.
Fiscal Year -End Revenue Projections
Revenue Source
Adjusted2Budget
Projected
Variance
Sales Tax
$ 10,567,101
$ 11,023,571
$ 456,470
Proposition D Tax
9,410,000
9,192,000
(218,000)
Property Tax
1,537,243
2,061,748
524,505
Property Tax in Lieu of VLF
4,931,260
5,121,839
190,579
Property Tax in Lieu of Sales Tax
3,522,366
3,415,323
(107,043)
Other Revenue
9,413,138
9,469,264
56,126
Total
$ 39,381,108
$ 40,283,745
$ 902,637
"Other Revenue" includes adopted budget total, plus San Diego County Law Enforcement Foundation grant ($3,380, body annor) and
donations from Sycuan Casino ($3,000, fireworks) and San Diego Unified Port District ($25,000, 125th anniversary celebration)
In addition to the positive effect on sales tax revenues from the aforementioned growth in retail
sales, property taxes for FY 2012-13 have increased in conjunction with a 3.86% increase in
assessed valuations, instead of remaining flat, as was assumed in the budget. Further raising
property tax revenue expectations, the City received an unanticipated distribution of property tax
revenues of $254,950 in January 2013, following the State's review of the Successor Agency's
obligations for the January through June, 2013 period, which deemed a portion of the property
tax balances in the Successor Agency's account to be residual.
Proposition D (or "District") Taxes are expected to fall short of the budgeted estimate with the
above -referenced subsiding of out -of -district durable goods purchases. Changes in Property Tax
in Lieu of Vehicle License Fee ("VLF") revenues are tied to the change in assessed value. The
current budget assumed no growth over FY 2011-12 actuals in this category, but the revenue is
now projected to exceed budget by $190,579 or 3.86%, in direct correlation to assessed
valuations. Regarding Property Tax in Lieu of Sales Tax, the projected amount is based on
calculations released in August by the State Department of Finance ("DoF"), replacing the
slightly higher estimate provided by the City's sales tax consultant during preparation of the
current fiscal year budget. The DoF's calculation incorporates an estimated value of the
reduction in the general purpose sales and use tax rate from 1% to 0.75% for the current budget
year and a "settle -up" adjustment based on prior -year actuals. Finally, the projected "Other